Stablelad,
No, today's earthquake bomb only related to Defined Contribution (DC) pensions - not Final Salary ones. Osborne made a very brief mention of them, when he said that he would continue to maximise value for the tax payer. Doesn't sound too hot. If you had a DC pension fund of £750k though, in theory you could take it when and how you liked, taxed merely at your Marginal Rate.
It's going to make AVCs pointless, personal pensions a bit of a no brainer and transferring out of AFPS a much more seductive proposition.
Chuggers,
How are you?! Well, I hope.
An annuity, however good the rate, will never be able to compete with someone having their pension parked in a cash account, that's the problem. In principle market forces and supply and demand could go head to head with the freedoms of hard cash vs the restrictions of an annuity but thats like two bald men fighting over a brush and comb. Rates are determined, not by market forces, but by fear and greed - demographics (fesr) and provider profits (greed).
You could take it one stage further than that even - life companies do good business from income drawdown rather than annuity. It's almost as if drawdown is dead, we can forget about annuities completely. If drawdown is dead, what of the life companies? Let's assume that someone takes their £250k pension fund, what do they then do with it - give it back to the life company but with 20/40% less?
I think we'll see some very interesting product innovation; folk, generally, are poorly informed - there will be billions out there, just sloshing around in either crappy savings accounts or expensive investments. We live in interesting times.